Winbro Logistics (P) Ltd., CHENNAI V. ACIT, CHENNAI

ITA 527/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96677 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 29-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: S SRIDHAR
• Keywords: Non-deduction of tax

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . , ' $ , % ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER ./ I.T.A.NO.527/MDS/2014 ( / ASSESSMENT YEAR: 2008-09) M/S. WINBRO LOGISTICS (P)LTD., 2 ND FLOOR, 2, KRISHNAN KOIL ST., PARRYS, CHENNAI-600 001. VS THE ASSISTANT COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-III(3) CHENNAI-34. PAN: AAACW6500G ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. A.B.KOLI, JCIT /DATE OF HEARING : 29 TH DECEMBER, 2015 /DATE OF PRONOUNCEMENT : 31 ST DECEMBER, 2015 / O R D E R PER CHALLA NAGENDRA PRASAD, JM: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, CHENN AI DATED 01.11.2013 FOR THE ASSESSMENT YEAR 2008-09. 2. AT THE TIME OF HEARING, COUNSEL FOR THE ASSESSEE SUBMITS THAT GROUNDS OF APPEAL NOS. 2 TO 4 RAISED I N RESPECT OF DISALLOWANCE OF EPF AND DONATION ARE NOT PRESSED . TO THAT EXTENT, HE MADE AN ENDORSEMENT IN THE ORDER SHEET A S NOT PRESSED. THUS, THESE GROUNDS 2 TO 4 ARE DISMISSED AS NOT PRESSED. 2 ITA NO.527/MDS/2014 3. REMAINING GROUNDS OF APPEAL NOS.5 TO 7 ARE RAISE D CHALLENGING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE DISALLOWANCE MADE UNDER SECTION 40(A)(IA) OF THE ACT FOR NON-DEDUCTION OF TAX AT SO URCE IN RESPECT OF FREIGHT CHARGES PAID BY THE ASSESSEE. 4. AT THE TIME OF HEARING, COUNSEL FOR THE ASSESSEE SUBMITS THAT HE IS CONFINING HIS ARGUMENT TO THE IS SUE OF DISALLOWANCE IF AT ALL TO BE MADE SHOULD BE MADE O NLY FOR THE PAYMENTS OUTSTANDING AS ON 31 ST MARCH I.E. END OF THE ACCOUNTING YEAR AND NOT TO THE PAYMENTS ALREADY MA DE DURING THE YEAR. FOR THIS PROPOSITION, HE PLACES RE LIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF N.PALANIVELU VS. ITO (40 ITR (TRIB) 325 [CH ENNAI]). 5. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTS THE ORDER OF THE LOWER AUTHORITIES AND SUBMITS THAT NO DETAILS HAVE BEEN FURNISHED AS TO WHETHER THE PAYMENTS HAVE BEEN MADE DURING THE YEAR OR PAYMENTS ARE OUTSTANDING BY THE END OF THE ACCOUNTING YEAR AND FOR THIS PURPOSE THE MATTER SHOULD GO BACK TO THE ASSESSING OFFICER FOR VERIFICATION. 3 ITA NO.527/MDS/2014 6. HEARD BOTH THE SIDES. PERUSED ORDERS OF LOWER AUTHORITIES. THIS BENCH IS CONSISTENTLY HOLDING TH AT IN CASE OF DISALLOWANCE UNDER SECTION 40(A)(IA) FOR NON-DEDUC TION OF TAX AT SOURCE, THE AMOUNTS OUTSTANDING AS ON 31 ST MARCH OF THE ACCOUNTING YEAR ONLY HAVE TO BE DISALLOWED AND NOT THE AMOUNTS WHICH WERE ALREADY PAID DURING THE YEAR, IN VIEW OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN T HE CASE OF MERLIYN SHIPPING & TRANSPORTS VS. ACIT (136 ITD 23 ). IN THE CASE OF N. PALANIVELU VS. ITO (SUPRA) AS RELIED ON BY THE COUNSEL, THE CO-ORDINATE BENCH HELD AS UNDER:- 3. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE SPECIAL BENCH OF THE TR IBUNAL IN THE CASE OF MERILYN SHIPPING AND TRANSPORTS VS. ACI T (2012) 136 ITD 23 (VISAKHAPATNAM) AND JUDGMENT OF GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S. VECTOR SHIPPING S ERVICES (P) LTD IN ITA NO. 122 OF 2013 DATED 09.7.2013 HELDTHAT SEC 40(A)(IA) IS NOT APPLICABLE WHEN THERE IS NO OUTSTA NDING BALANCE AT THE END OF THE CLOSE OF THE YEAR RELEVANT TO THE ASSESSMENT YEA IN RESPECT OF THESE PAYMENT. HOWEVER, THE ASSESSEE HAS NOT BROUGHT ON RECORD, THE DETAILS OF OUTSTANDING EXPENSES OR SCHEDULE OF SUNDRY CREDITORS SHOWING WHETHER THE IMPUGNED AMOUNT IS OUTSTANDING AT THE END OF THE CLOSE OF THE PREVIOUS YEAR RELEVANT T O THE ASSESSMENT YEAR EITHER IN THE NAME OF THE PARTY OR OUTSTANDING EXPENSES. HENCE, IN THE INTEREST OF JUS TICE, WE ARE REMITTING THE ISSUE BACK TO THE FILE OF THE ASS ESSING OFFICER WITH DIRECTION TO VERIFY THE CLAIM OF THE AS SESSEE AND THE ASSESSEE SHALL PLACE NECESSARY EVIDENCE IN SUPPO RT OF HIS CLAIM. 4. FURTHER, WE MAKE IT CLEAR THAT IF THE IMPUGNE D AMOUNT IS NOT OUTSTANDING AT THE END OF THE CLOSE OF THE A SSESSMENT YEAR IN RESPECT OF THE EXPENSES EITHER AS OUTSTANDIN G EXPENSES OR AS SUNDRY CREDITORS, THIS AMOUNT CANNOT BE DISALLOWED. THIS GROUND IS REMITTED BACK TO THE ASS ESSING OFFICER FOR FRESH CONSIDERATION. 4 ITA NO.527/MDS/2014 7. RESPECTFULLY FOLLOWING THE SAID DECISION, WE RES TORE THIS ISSUE FOR LIMITED PURPOSE OF VERIFICATION TO THE AS SESSING OFFICER AS TO WHETHER THE AMOUNTS WERE PAID DURING THE YEAR OR OUTSTANDING AS ON 31 ST MARCH OF THE ACCOUNTING YEAR. THE ASSESSING OFFICER IS DIRECTED TO VERIFY AND DISALLO W ONLY THE OUTSTANDING AMOUNTS AS ON 31 ST MARCH OF THE ACCOUNTING YEAR. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DECEMBER, 2015. SD/- SD/- ( # ) ( & (# ) ( CHANDRA POOJARI ) ( CHALLA NAG ENDRA PRASAD ) * / ACCOUNTANT MEMBER ( * / JUDICIAL MEMBER ( /CHENNAI, , /DATED 31 ST DECEMBER, 2015 SOMU ./ 0/ /COPY TO: 1. APPELLANT 2.RESPONDENT 3. 1 () /CIT(A) 4. 1 /CIT 5. / 5 /DR 6. /GF .